Carrying costs question

[Troy Kingsbury]

what is a good rule of thumb to calculate carrying costs on a house we are rehabbing and flipping? Is there an average percentage to put in your deal calculations?

[Jeff Pollack]

Hi Troy,

I'm not sure about a % to use and would be interested to see if folks here use a %. I always assume 6 months of holding costs (taxes, insurance, utilities, interest).

[Troy Kingsbury]

Thanks, Jeff! What I am trying to work up is an annual budget on $1,500,000 in home sales. In figuring out the expenses I got stuck on the holding costs. My best educated guess would be around 6% (which would include closing cost). Thoughts?

[J Scott]

This might help:

Calculating Fixed Costs